It is the tool for every address that changes for good: a renamed page, a site moved to a new domain, http moved to https, www merged with the bare domain. The server answers the old address with a 301 status and the new location; the engine updates its index over the following weeks.
A redirect should land on a final page that returns 200, not on another redirect, and should keep the reader on the equivalent page rather than on the home page. Google treats a mass redirect to the home page as a soft 404. Keeping a list of redirects for years is normal: old links keep bringing visitors.